83.05

OPINION NO. 83-5

An opinion has been requested concerning whether an Office Secretary II in the Department of Agriculture (DAGR) may own and operate a horse riding stable licensed by the Department.

This request is presented by an Office Secretary II (the Requestor) in the Meat and Poultry Inspection Division under DAGR's Assistant Secretary for Animal Health and Consumer Services. She is a secretary whose duties, according to her immediate supervisor as well as the Assistant Secretary, are entirely clerical. Her Division is one of six reporting to the Assistant Secretary for Animal Health and Consumer Services, none of which have any specific authority over horse riding stables. The Animal Health Division is responsible for licensing livestock dealers and would only deal with a riding stable if the entity were also a livestock dealer. Horse riding stables are licensed by the State Board of Inspection of Horse Riding Stables, under the Director of Agricultural Development and Marketing.

The Requestor is the owner and operator of a horse stable located in Anne Arundel County. She is the sole owner and manager of the business, though it is conducted on property owned by her parents and used by her rent free. She estimates the value of the business and her annual income from it as exceeding $1,000. The Requestor's business involves a nine-horse barn housing three horses owned by her, and, currently, four animals boarded on a monthly fee basis by other individuals. The horses are all show horses that are not rented for use by other parties. The Maryland law requiring licensing of horse stables (Agriculture Article, §§2-701 to 2-719, Annotated Code of Maryland) defines a boarding stable as an "establishment that stables five or more horses and receives compensation for these services." (§2-701(c).) The Requestor prior to her DAGR employment had boarded up to six animals and been licensed by the Board. At the time of her employment she was advised by the Department to give up her license, and did so, reducing her boarded population to below the minimum number for which a license is required. She now wants to expand her activities to accept additional boarders up to the maximum capacity of her barn, and would therefore like to have her stable relicensed.

This request raises issues concerning the outside employment and financial interest prohibitions of §3-103(a)(1)(i) of the Public Ethics Law (Article 40A, §3-103(a)(1)(i), Annotated Code of Maryland, the Ethics Law).1 Under prior opinions regarding the definition of agency, the Requestor's stable would, if licensed by the Board, be an entity subject to the authority of her agency. (See, for example, Opinions No. 83-3 and 80-18.) Also, we have consistently held that ownership and management of a sole proprietorship business enterprise results in both an employment and ownership interest as contemplated in §3-103(a)(1)(i) of the Ethics Law. (See Opinions No. 83-3, No. 82-21, and No. 81-45). As she has indicated that the value of the business and her annual income from it exceed $1,000, the Requestor's ownership interest is a financial interest as contemplated in §3-103(a)(1)(i) and defined in §1-201(m) of the Law. Her continued relationship with the business if it is licensed would thus appear to be a violation of §3-103(a)(1)(i) unless it is excepted.

The exception to be considered in this context appears in the introduction to §3-103(a), which establishes employment and interest prohibitions "except as permitted by regulation of the Commission where such interest is disclosed or where such employment does not create a conflict of interest or appearance of conflict." Exception criteria regarding outside employment were adopted in July and became effective August 2, 1982 (COMAR 19A.02.01) and financial interest exception criteria were adopted effective on January 31, 1983 (COMAR 19A.02.02). Both of these sets of regulations define criteria designed to identify situations where relationships between official duties and the outside employment or interest are so remote as to make a conflict of interest or appearance of conflict unlikely.

In applying these criteria to the Requestor's situation, we note that the only issue arises under COMAR 19A.02.01.03F and 19A.02.02.03G, both of which would bar application of the exception for individuals whose private relationships involve non-ministerial duties that relate to the agency's authority over the private entity. As the sole owner and manager of her stables, the Requestor would be the person responsible for ensuring its compliance with the DAGR licensing requirements, thus raising an issue under these items. Both of the regulations provide, however, that an exception may be allowed notwithstanding a problem under these items, if the agency head indicates that the employment or financial interest would not impair the credibility of the agency or its mission. (See COMAR 19A.02.01.04 and 19A.02.02.04.) All of the agency personnel contacted in connection with this request agree that this situation would not be a problem for the agency or result in an apparent conflict that would be embarrassing for the agency, and a written confirmation of this view has been provided from the agency head.

Under these circumstances, we conclude that the exception allowed in §3-103(a)(1) of the Law may be applied to this Requestor and that her application for and retention of a license for her stables consistent with the facts provided to us would not be a violation of §3-103(a)(1)(i) of the Law.2

Herbert J. Belgrad, Chairman
    Reverend John Wesley Holland
    Betty B. Nelson
    Barbara M. Steckel

Date: February 17, 1983

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1 Given the facts here, including the Requestor's duties and the organizational relationship of the Board to her Division, application of the subsection 3-103(a)(1)(ii) inconsistent employment provision or of the §3-101 nonparticipation provision would appear to be unlikely; therefore these and other provisions of the Law have not been addressed here.

2 It should be noted, of course, that both the Law and the financial interest exception regulations (COMAR 19A.02.02.03A) require disclosure of the interest for the exception to apply. For those not required to file on an annual basis this disclosure must be within 60 days of the effective date of the regulations or within 30 days of having the interest, or reason to know that it is a conflict, whichever is later. The Requestor will be provided with a disclosure form as soon as it is available, and her continued reliance on the exception is conditioned on her satisfactory submission of the form within the 60 days set forth in the regulations for her situation.